SPEECH 


MR.  RIVES,  OF  VIRGINIA 


■ 

CURRENCY  OF  THE  UNITED  STATES, 


AND  THE 


COLLECTION  OF  THE  PUBLIC  REVENUE.  , 


Delivered  in  the  Senate  U.  S.  January  10,  1837. 

A  T 


WASHINGTON  : 

fe&INfRD  AT  THR  GLOBE  OPPICJB. 


1837. 


33x4 

Kris 


I 


I  I  ./ 

K  '  Kv\ 

SPEECH. 


The  following  resolution  was  submitted  by  Mr.  RIVES,  as  a  substitute  for  the  resolution 

of  Mr.  Ewing,  of  Ohio,  proposing  to  rescind  the  Treasury  order  of  July  11,  1836  : 

• 

Resolved ,  That  hereafter  all  sums  of  money  accruing  or  becoming  payable  to  the  United 
States,  whether  from  customs,  public  lands,  taxes,  debts,  or  otherwise,  shall  be  collected  and 
paid  only  in  the  legal  currency  of  the  United  States,  or  in  the  notes  of  banks  which  are  paya¬ 
ble  and  paid  on  demand  in  the  said  legal  currency,  under  the  following  restrictions  and  condi¬ 
tions  in  regard  to  such  notes:  that  is,  from  and  after  the  passage  of  this  resolution,  the  notes 
of  no  bank  which  shall  issue  bills  or  notes  of  a  less  denomination  than  five  dollars,  shall  be 
received  in  payment  of  the  public  dues;  from  and  after  the  first  day  of  July,  1839,  the  notes 
of  no  bank  which  shall  issue  bills  or  notes  of  a  less  denomination  than  ten  dollars,  shall  be 
receivable;  and  from  and  after  the  first  of  July,  1841,  the  like  prohibition  shall  be  extended  to 
the  notes  of  all  banks  issuing  bills  or  notes  of  a  less  denomination  than  twenty  dollars:  Pro¬ 
vided,  however,  That  no  notes  shall  be  taken,  in  payment  by  the  collectors  or  receivers,  which 
the  banks  in  which  they  are  to  be  deposited  shall  not,  under  the  supervision  and  control  of  the 
Secretary  of  the  Treasury,  agree  to  pass'lo  the  credit  of  the  United  States  as  cash. 

The  question  being  on  the  adoption  of  his  substitute — 

Mr.  RIVES  said,  that  in  asking  the  indulgence  of  the  Senate,  it  was  not 
his  design  to  abuse  their  patience  by  rearguing  the  questions  which  had 
already  been  so  fully  and  so  ably  discussed,  in  relation  to  the  legality  or 
the  policy  of  the  Treasury  Circular.  It  was  his  wish  only  to  state,  some¬ 
what  more  at  large  than  he  had  yet  had  an  opportunity  of  doing,  the  views 
under  the  influence  of  which  he  had  offered  the  proposition  which  is  now 
pending  before  the  Senate  as  an  amendment  to  the  resolution  of  the  Sena¬ 
tor  from  Ohio,  (Mr.  Ewing.)  In  reference  to  the  most  important  objects  of 
the  Treasury  Circular,  he  regarded  that  measure  as  having  done  its  office; 
and  the  interests  of  the  country  are  now  much  more  concerned  in  the  pro¬ 
vision  we  shall  make  for  the  future,  than  in  any  decision  we  may  pronounce 
upomthe  past.  When  I  had  the  honor,  some  days  ago,  said  Mr.  R.,  of  ad¬ 
dressing  a- few  remarks  to  the  Senate  on  this  subject,  I  said  what  I  take 
great  pleasure  now  in  repeating,  that- in  whatever  different  lights  the  opera¬ 
tion  of  the  Treasury  Circular  may  have  been  viewed,  of  one  thing  I  was 
thoroughly  persuaded — that  the  motives  which  had  induced  the  liigh  func¬ 
tionary  at  the  head  of  the  Government  to  direct  the  issuing-of  it,  were  in 
perfect  consonance  with  that  elevated  and  patriotic  spirit  which  had  so  con¬ 
spicuously  marked  the  whole  course  of  his  public  life;  and  that  no  defect 
of  legality,  in  my  .estimation,  had  been  shown  in  the  authority  under  winch 
it  was  issued.  I  added,  also,  that  the  measure  was  'properly  to  be  viewed 
as  a  temporary  one,  tq.continue  in  operation  until  the  action  of  Congress 
on  tile  whole  subject  could  be  obtained  ;  and  that  the  President  himself  as 
shown  by  the  evidence  of  his  message  at  the  commencement  of  the  session, 
attached  no  importance  to  its  adoption  as  a  permanent,  ride  of  policy. 

One  of  the  leading  objects  of  the  Treasury  Circular,  at  the  time  it  was 
issued,  was  to  check  that  tendency  to  extravagant  bank  issues  and  bank 
credits,  which  has  so  signally  marked  the  history  of  the  last  twelve  or 
eighteen  months.  But,  so  far  as  that  object  is  concerned,  the  same  effect 
will  now  be  produced  in  a  manner  not  less  certain,  though  by  a  process 
more  gradual,  and  therefore  easier  and  safer  to  the  community,  by  the 
operation  of  the  depositc  act.  No  one  can  doubt,  Mr.  President,  that  one 
of  the  chief  causes  of  the  recent  over-action  of  the  banking  system  in  this 


4 


country”,  is  to  be  found  in  the  immense  sums  of  public  moneys  left  in  the 
deposite  banks,  and  which  have  been  used  and  traded  upon  by  them,  as  an 
addition  of  so  much  to  their  banking  capitals.  This  is  a  state  of  things 
which  has  been  eminently  pernicious  in  all  its  bearings.  The  correction 
of  so  great  an  evil  formed  in  my  mind  one  of  the  strongest  considerations 
for  giving  the  cordial  support  I  did  to  the  deposite  act  of  the  last  session  ; 
a  measure  which,  however  much  misconceived  or  misrepresented  in  regard 
to  its  true  character,  has,  in  my  opinion,  conferred  upon  the  country  a 
double  benefaction  of  the  highest  value :  first,  in  putting  out  of  the  way  of 
the  Government  the  temptation,  whose  powerful  influence  we  were  already 
beginning  to  feel,  to  useless,  extravagant,  and  anti-republican  expenditure; 
and,  secondly,  in  taking  from  the  deposite  banks  that  gratuitous  and  arti¬ 
ficial  increment  of  their  capitals,  which  has  been  a  main  cause  of  the 
unnatural  distension  of  our  paper  currency,  and  of  that  inordinate  spirit  of 
speculation,  which  has  prevailed  through  the  country.  In  gradually  with* 
drawing,  as  we  are  now  doing  by  the  act  of  the  last  session,  these  large 
amounts  of  the  public  treasure  from  the  possession  of  the  deposite  banks, 
and  in  avoiding,. as,  I  trust,  by  a  wise  and  provident  legislation,  we  shall 
do,  the  accumulation  of  any  idle  surplus  in  future,  the  Government  will  take 
away  the  stimulus  which  itself  has  given  to  the  excessive  issues  and  credits 
of  the  banks ;  and  we  may  then  hope  that,  under,  the  salutary  control  of 
the  laws  of  trade,  they  will  return  within  those  safe,  proper,  and  natural 
limits,  which  the  business  of  the  community  requires. 

While  on  this  branch  of  the  subject,  Mr.  President,  I  will  make  one 
other  observation.  However  necessary  or  desirable  the  contraction  of  our 
paper  circulation  may  be,  (if  it  be,  indeed,  in  the  large  excess  which  is  sup¬ 
posed  by  many,)  it  must  be  borne  in  mind  that  there  is  no  operation  more- 
delicate  than  the  reduction  of  the  currency  of  a  country.  A  decreasing 
circulating  medium,  it  is  agreed  alike  by  theoretical  writers  and  by  en¬ 
lightened  practical  men,  is  precisely  that  condition  in  the  moneyed  affairs 
of  a  community  which  is  the  most  critical  and  distressing.  It  is  a  transi¬ 
tion  from  high  to  low  prices,  from  a  certain  and  liberal  reward  of  labor  to 
diminished  wages  and  precarious  employment,  from  active  and  prospering 
industry  to  general  langour  and  depression  in  all  the  operations  of  business. 
It  is  a  change  to  which  society  always  adjusts  itself  slowly  and  painfully; 
and,  under  the  most  favorable  circumstances,  must  be  attended  with  dis¬ 
tress — often  with  extensive  ruin.  Great  caution,  therefore,  is  necessary, 
lest  it  bel  unduly  precipitated  in  its  progress,  or  harshly  aggravated  in  its 
effects.  We  have,  in  the  history  of  our  own  country,  at  a  period  not  too 
remote  for  the  recollection  of  most  of  us,  a  memorable  example  of  the 
distressing  effects  of  a  rapid  reduction  of  the  circulating  medium.  It  is 
strikingly  exhibited  in  all  its  details  in  the  able  report  of  Mr.  Crawford, 
then  Secretary  of  the  Treasury,  on  the  currency,  in  1820.  It  is  there 
shown  that  the  circulation  of  the  country,  in  the  three  years  from  1816  to 
1819,  had  been  brought  down  from  110  millions  in  the  former,  to  45  mil¬ 
lions  in  the  latter ;  making  the  enormous  reduction  of  65  millions  within 
that  short  period!  The  scene  of  wide-spread  ruin  and  distress,  which 
ensued,  is  fresh  in  the  memories  of  all  who  witnessed  it.  It  inculcates,  at 
least,  the  necessity  of  caution  in  the  action  of  the  Government,  on  this  sub¬ 
ject.  It  is  our  duty  to  withdraw  from  the  banking  operations  of  the  coun¬ 
try  that  artificial  stimulant  which  the  Government  itself  has  administered; 
but  that  being  done,  a  just  policy,  in  general,  requires  that  the  concerns  of 


5 


trade  should  be  left  to  regulate  themselves  by  their  own  natural  and  reme¬ 
dial  laws. 

Regarding,  then,  the  Treasury  Circular  as  having  mainly  done  its  office, 
we  are  now  called  upon  to  establish  some  permanent  and  equal  rule  for  the 
collection  of  the  public  revenues.  It  is  a  duty  which  we  cannot  evade,  if 
we  would.  In  the  joint  power  which  the  constitution  invests  in  Congress, 
to  “lay  and  collect5’  taxes,  our  duty  is  read  to  us  in  terms  too  significant  to 
be  mistaken.  It  is  as  much  a  part  of  the  legislative  authority  to  say  in 
what  manner  and  by  what  rule  the  collection  of  the  public  revenue  shall 
be  effected,  as  to  say  to  what  amount  and  from  what  sources  it  shall  be 
raised.  Important  as  such  a  regulation  is  at  all  times,  it  derives,  at  the 
present  moment,  a  particular  interest,  from  its  close  connexion  with  the 
subject  of  the  currency.  It  is  in  that  connexion,  that  all  who  have  partici¬ 
pated  in  this  debate  have  discussed  the  question  before  the  Senate;  and  it  is, 
doubtless,  in  that  connexion  that  the  public  attention  is  turned  with  most 
anxiety  to  our  decision  upon  it.  I  feel,  Mr.  President,  all  the  magnitude 
and  all  the  difficulty  of  this  great  question  of  the  currency.  There  is 
none  that  rises  higher  in  importance,  or  descends  more  deeply  into  the  inter¬ 
ests  of  society.  It  “  comes  home  to  the  business  and  the  bosoms  of  men.” 
It  affects  alike  the  humblest  laborer  and  the  wealthiest  capitalist ;  on  it 
depend  the  security  of  property,  the  stability  of  contracts,  the  comfort  and 
support  of  families,  and,  I  will  add,  in  a  great  degree,  the  public  morals ; 
for  nothing,  in  my  opinion,  is  more  calculated  to  unsettle  the  moral  sense 
and  habits  of  a  community  than  the  dispositions  and  pursuits  fostered  by  the 
lottery  of  a  fluctuating  currency.  In  approaching  such  a  subject,  I  feel  all 
the  diffidence  which  a  just  sense  of  its  difficulty  and  importance  properly 
inspires.  But  having  submitted  to  the  Senate  a  proposition  which,  if  adopt¬ 
ed;  would,  I  flatter  myself,  exert  no  small  influence  on  this  great  interest  ; 
and  as  the  friends  of  the  administration  (myself  among  the  number)  have 
been  accused  of  entertaining  visionary,  impracticable,  and  pernicious 
notions,  in  regard  to  a  reform  of  the  currency,  t  must  beg  the  indulgence 
of  the  Senate  while  I  state,  with  as  much  precision  as  1  may,  the  views 
of  that  reform,  which  I  entertain,  and  which  have  determined  the  shape 
of.  the  proposition  now  under  their  consideration. 

In  discussing  the  question  of  a  reform  of  the  currency,  it  is  necessary 
to  settle  our  ideas  clearly  as  to  two  things  :  first,  the  nature  and  extent  of 
the  end  to  be  aimed  at;  secondly,  the  means  by  which  it  is  to  be  attained. 
If  I  am  asked,  what  is  the' end  I  propose — whether  I  am  in  favor  of  a  spe¬ 
cie  circulation  exclusively,  and  the  .total  suppression  of  bank  paper,  I  an¬ 
swer,  no.  Even  if  such  an  object  were  desirable,  it  is  plainly  impracticable. 
In  the  present  state  of  commercial  progress  and  refinement  throughout  the 
world,  it  would,  probably,  be  impracticable  any  where  ;  but  in  this  coun¬ 
try,  and  under  our  system  of'  government  especially,  it  is  obviously 
.  wholly  unattainable.  Whether  right  or  wrong,  we  find  twenty-six  inde¬ 
pendent  State  Legislatures  possessed  of  the  power  to  create  banking  corpo¬ 
rations.  Whatever  speculative  doubts  may  exist  in  the  minds  of  some  as 
to  the  constitutional  validity  of  this  power,  the  States  now  actually  possess 
and  exercise  it,  as  they  have  invariably  done  from  the  foundation  of  the 
Government,  and  there  is  not  the  slightest  probability  that  they  will  ever 
be  divested  of  it.  In  every  sober  and  practical  scheme  of  policy,  we  must 
proceed  upon  the  assumption  that  this  independent  State  power  will  rema  n. 
How,  then,  can  the  banking  system  be  suppressed  by  this  Government/ 


6 


Such  a  notion,  if  entertained  any  where,  would  indeed  be  Utopian  and 
visionary. 

My  object,  then,  would  be,  not  the  destruction  of  the  banking  system 
and  the  total  suppression  of  bank  paper,  but  an  efficient  regulation  of  it, 
and  its  restriction  to  safe  and  proper  limits  ;  not  the  exclusive  use  of  specie 
as  a  circulating  medium,  but  such  a  substantial  enlargement  and  general 
diffusion  of  it,  in  actual  circulation,  as  would  make  it  the  practical  currency 
of  common  life,  the  universal  medium  of  ordinary  transactions — in  short, 
the  money  of  the  farmer,  the  mechanic,  the  laborer,  and  the  tradesman  ; 
while  the  merchant  should  be  left  in  the  enjoyment  of  the  facilities  of  a 
sound  and  restricted  paper  currency  for  his  larger  operations.  Such  a  re¬ 
formation  in  the  currency  as  this,  would,  in  my  opinion,  be  productive  of 
the  most  beneficial  results.  It  would  give  security  to  the  industrious  classes 
of  society  for  the  products  of  their  labor,  against  the  casualties  incident  to 
the  paper  system.  The  laborer,  in  returning  to  the  bosom  of  his  family 
from  his  weekly  toil,  would  no  logger  find  his  slumbers  broken  by  the  ap¬ 
prehension  that  the  hard  earnings  of  the  week,  perhaps  the  accumulation 
of  long  years  of  honest  industry,  might  be  dissipated,  in  a  moment,  by  the 
explosion  of  a  bank,  or  the  bursting  of  some  paper  bubble.  It  would  give 
security,  to  a  great  extent,  to  the  whole  body  of  the  community,  against 
those  disastrous  fluctuations  in  the  value  of  property  and  contracts,  which 
arise  from  the  ebbs  and  flows  of  an  unrestricted  paper  currency.  It  would 
give  security  to  the  banks  themselves,  by  providing  them,  in  the  daily  in¬ 
ternal  circulation  of  the  country,  an  abundant  and  accessible  fund  for  re¬ 
cruiting  their  resources,  whenever  they  should  be  exposed  to  an  extraor¬ 
dinary  pressure. 

This,  sir,  is  the  happy  state  of  things  we  might  promise  ourselves  from 
replacing  (as  it  is  the  aim  of  the  proposition  which  I  have  had  the  honor  to 
submit,  to  do)  all  bank  bills  under  the  denominationof  twenty  dollars  with  a 
solid  circulation  of  gold  and  silver.  Is  there  any  thing  wild,  any  thing 
visionary,  any  thing  pernicious,  in  such  a  system  of  currency  as  this  ?  It 
has  the  sanction,  Mr.  President,  of  the  profoundest  writers  on  questions  of 
political  economy,  and  has  received  the  practical  assent  of  the  wisest  na¬ 
tions.  I  am  well  aware  that  it  would  ill  become  me  to  present  for  the  con¬ 
sideration  of  the  Senate  any  scheme  which  was  not  thus  tested  and  ap¬ 
proved.  Of  all  the  writers  who  have  treated  and  examined  questions  of 
this  character,  none  possess  so  high  an  authority  as  the  author  of  the 
“Wealth  of  Nations.”  It  has  been  well  and  justly  Said,  that  Adam  Smith 
had  done  for  the  science  of  political  economy  what  Bacon  and  Newton  had 
done  for  physical  science,  and  Sydney  and  Locke  for  the  science  of  gov¬ 
ernment,  and  the  fundamental  principles  of  civil  and  political  liberty.  His 
work,  appearing  contemporaneously  with  the  American  revolution,  was 
deeply  imbued  with  the  free  spirit,  and  the  large  and  vigorous  thought, . 
which  so  remarkably  distinguished  that  great  era.  He  came  forth  as  the 
zealous  and  powerful  champion  of  free  trade,  the  inflexible  opponent  of 
monopoly  and  restriction  in  all  their  multiplied  forms,  the  ardent  advocate 
of  every  thing  that  is  liberal,  generous,  and  popular,  in  the  institutions  of 
society  and  the  intercourse  of  nations.  No  work  has  ever  exercised  so 
large  an  influence  for  good  on  the  policy  and  destiny  of  nations,  and  none, 

I  am  sure,  considering  the  stamp  of  liberty  as  well  as  wisdom  impressed 
upon  it,  is  better  entitled  to  the  respect  of  an  assembly  of  American  legis¬ 
lators.  Adam  Smith,  by  a  strange  mistake,  lias  been  held  up.  rather  op. 


7 


probriously,  as  the  advocate  of  a  paper  system — as  the  founder,  in  fact,  ot 
the  paper  school  !  Sir,  there  can  be  no  greater  mistake  than  this.  While 
he  recognised  the  utility  of  a  judicious  system  of  banking,  in  liberating  and 
putting  into  productive  employment  capital  which  would  otherwise  remain 
dead  and  inactive,  and  the  facilities  it  is  calculated  to  afford  to  commerce, 
he  yet  insists  that  the  general  circulation  of  the  country  should  be  of  gold 
and  silver. 

As  the  general  principles  he  has  laid  down  on  the  subjects  of  banking 
and  currency  continue  still  to  be  appealed  to  by  the  enlightened  writers  who 
have  followed  him,  as  affording  the  soundest  exposition  of  those  subjects, 
whatever  modifications  of  subordinate  points  may  have  been  made  by  sub¬ 
sequent  inquirers,  I  will  give  to  the  Senate,  and  principally  in  the  words  of 
Adam  Smith  himself,  an  outline  of  his  system  of  currency.  After  speaking 
of  the  advantages  to  be  expected  from  a  judicious  and  properly  conducted 
system  of  banking,  he  says  expressly,  that  “the  commerce  and  industry  of 
a  country  are  not  so  secure  when  suspended,  as  it  were,  on  the  Daedalian 
wings  of  paper  money,  as  when  they  travel  about  on  the  solid  ground  of 
gold  and  silver .”  He  says,  therefore,  it  is  the  policy  of  wise  Governments 
“  to  guard,  not  only  against  that  excessive  multiplication  of  paper  money 
which  ruins  the  very  banks  which  issue  it,  but  even  against  that  multipli¬ 
cation  of  it  which  enables  them  to  fill  the  greater  part  of  the  circulation 
of  the  country  with  it."  He  then  proceeds  to  show  that  “the  circulation 
of  every  country  may  be  considered  as  divided  into  two  different  branches  : 
the  circulation  of  the  dealers  with  one  another,  and  the  circulation  be¬ 
tween  the  dealers  and  consumers.’’  His  next  position  is,  “  that  paper  money 
may  be  so  regulated  as  either  to  confine  itself  very  much  to  the  circulation 
between  the  different  dealers,  or  to  extend  itself  likewise  to  a  great  part  ot 
that  between  fhe  dealers  and  consumers.”  This  regulation  is  effected  by 
fixing  the  denomination  of  the  notes  permitted  to  be  issued.  “  It  were 
better,”  he  adds,  “  that  no  bank  notes  were  issued  in  any  part  of  the  king¬ 
dom  for  a  smaller  sum  than  five  pounds.'  Paper  money  would  then  con¬ 
fine  itself  to  the  circulation  between  the  different  dealers and  where  this 
is  the  case,  he  says,  “  there  is  always  plenty  of  gold  and  silver."  “  But 
where  it  extends  itself  to  a  considerable  part  of  the  circulation  between 
dealers  and  consumers,  it  banishes  gold  and  silver  almost  entirely  from  the 
country.”  The  system  of  Adam  Smith,  then,  resolves  itself  into  this:  that 
the  circulation  between  dealer  and  dealer  may  be  of  paper,  but  that  the 
circulation  between  dealer  and  consumer  should  be  of  the  precious  metals  ; 
that  this  result  ought  to  be  secured  by  prohibiting  the  issue  of  bank  notes 
for  a  less  sum  than  five  pounds,  and  that  if  such  a  restriction  be  adopted, 
there  “  will  always  be  plenty  of  gold  and  silver”  in  circulation,  performing 
all  the  offices  of  exchange  in  the  “ordinary  transactions’’  of  society,  while 
the  use  of  paper  would  be  confined  to  commercial  operations  of  a  larger 
,  scale.  Instead  of  being  the  advocate,  far  less  the  founder,  of  an  unre¬ 
stricted  paper  system,  he  urges  the  necessity  of  confining  it  to  commercial 
accommodation  in  the  larger  transactions  between  dealer  and  dealer.  He 
is  in  favor  of  the  suppression  of  all  bank  notes  under  five  pounds;  whereby 
gold  and  silver  will  fill  the  ordinary  channels  of  circulation,  and  become, 
in  fact,  the  common  practical  currency  of  the  country. 

But  this  system  does  not  rest  on  the  authority  of  Adam  Smith  alone. 
Not  to  mention  the  illustrious  names  or  the  policy  of  other  enlightened 
nations  in  support  of  it.  it  has  received  the  successive  sanction  of  a  long  line 


8 


of  the  ablest  practical  statesmen  in  England.  It  is  a  remarkable  fact,  that 
the  great  work  of  Adam  Smith  having  appeared  in  1776,  the  Parliament  of 
Great  Britain,  in  the  very  next  year,  passed  a  law  prohibiting  all  bankers 
from  issuing  notes  under  the  denomination  of  five  pounds.  This  continued 
to  be  the  legislative  policy  of  that  country  till  the  memorable  year  of  1797, 
when,  in  consequence  of  the  exigencies  and  embarrassments  of  that  tremend¬ 
ous  conflict,  growing  out  of  the  French  revolution,  which  desolated  and 
convulsed  Europe  for  more  than  twenty  years,  the  Bank  of  England,  with 
the  sanction  of  the  Government,  suspended  specie  payments,  and,  at  the 
same  time,  resorted  to  an  issue  of  one-pound  and  two-pound  notes.  As 
soon,  however,  as  the  war  was  at  an  end,  and  the  country  was  in  a  situation 
to  admit  of  the  resumption  of  specie  payments  by  the  bank,  the  enlightened 
statesmen  of  England  recurred  to  the  prohibition  of  all  notes  under  the 
denomination  of  five  pounds.  This  return  to  a  sound  policy,  however, 
was  not  accomplished,  nor  has  it  been  maintained,  without  encountering  a 
strenuous  and  persevering  opposition. 

There  is  something  so  instructive  in  the  history  of  this  reform  of  the 
currency  in  England,  that  it  deserves  to  be  traced  somewhat  more  in  detail. 
In  1819,  a  law  was  passed-  directing  a  complete  resumption  of  specie  pay¬ 
ments  by  the  bank  in  three  years,  to  wit,  in  1822;  and  at  the  same  time,  it 
was  enacted  that  in  two. years  after,  to  wit.  in  1824,  all  small  notes  under 
the  denomination  of  five  pounds  should  be  prohibited.  The  first  provision 
was  carried  fully  into  effect  at  the  designated  period ;  but,  such  was  the 
influence  of  the  country  bankers,  and  other  associated  interests,  that,  before 
the  appointed  time  for  the  suppression  of  the  small  notes  arrived,  the  latter 
prevision  was  repealed,  and  the  final  suppression  of  the  small  notes  was  ad¬ 
journed  to  1833,  the  year  of  the  expiration  of  the  charter  of  the  Bank  of 
England.  But  the  great  commercial  convulsion  of  1825,  which  swept 
banks,  merchants,  farmers,  every  thing  before  it,  with  the  destructive  fury 
of  a  tornado,  soon  after  occurred,  and  forcibly  admonished  British  states¬ 
men  of  the  necessity  of  seeking  a  remedy — in  part,  at  least — in  a  more  solid 
constitution  of  their  currency.  -Accordingly,  in  the  beginning  of  1826,  Lord 
Liverpool  and  Mr.  Robinson,  the  one  the.  First  Lord  of  the  Treasury,  the 
other  the  Chancellor  of  the  Exchequer,  introduced  and  carried  a  bill  provid¬ 
ing  for  the  prohibition,  after  April,  1829,  of  all  small  notes  under  the  denomi¬ 
nation  of  five  pounds.  This  law  was  stoutly  and  zealously  opposed  at  the  time 
of  its  enactment,  and  repeated  attempts  were  subsequently  made  to  procure  its 
repeal,  before  the  period  fixed  for  its  operation.  But  these  efforts  were 
happily  unavailing;  and  the  doctrine  of  Adam  Smith,  in  regard  to  the  pro¬ 
hibition  of  all  notes  under  the  denomination  of  five  pounds,  re-established 
in  1829,  after  experiencing  the  bitter  fruits  of  a  temporary  departure  from 
it,  may  now  be  considered  as  the  final  and  settled  policy  of  the  British 
Government.  It  has  received  the  sanction  and  support  of  her  ablest  states¬ 
men — of  Liverpool,  of  Peel,  of  Canning,  of  Huskisson,  of  Brougham,  of 
Wellington;  all  of  whom,,  upon  the  fullest  experience  and  consideration, 
have,  from  time  to  time,  borne  their  testimony  to  the  value  and  importance 
of  this  essential  restriction  upon  a  paper  circulation. 

And  what  has  been  the  result  in  practice  ?  Why,  to  give  to  the  people  of 
England  virtually  a  metallic  currency ;  for  gold  and  silver  form  there  the 
daily  habitual  medium  of  all  ordinary  transactions.  A  bank  note,  except 
on  special  occasions,  is  a  sort  of  phenomenon.  On  this  point  we  have  pre¬ 
cise  information.  It  appears,  from  statistical  returns  referred  to  by  the 


9 


Chancellor  of  the  Exchequer  in  the  House  of  Commons,  a  few  years  agor 
that  the  amount  of  gold  then  in  circulation  was  £22,000,000,  (twenty-two 
millions  of  pounds  sterling,)  and  of  silver  £8,000,000,  (eight  millions  of 
pounds  sterling.)  I  do  not  speak  of  gold  and  silver  locked  up  in  the  vaults 
of  banks;  but  of  that  which  passes  daily  from  hand  to  hand,  in  the  ordinary 
transactions  of  business.  Mr.  Gallatin,  in  his  instructive  pamphlet  on  the 
currency,  published  in  1830,  states  the  metallic  circulation  of  England  at 
precisely  the  same  amount.  Allowing  nothing  for  any  augmentation  since, 
the  people  of  England  have,  then,  an  actual  circulating  medium  of  gold 
and  silver  to  the  amount  of  about  one  hundred  and  fifty  millions  of  dollars. 
The  Secretary  of  the  Treasury,  (who,  doubtless,  has  access  to  the  most 
authentic  sources  of  information  on  the  subject,)  in  his  annual  report  at  the 
commencement  of  the  session,  states  the  whole  paper  circulation  of  Eng¬ 
land,  at  this  time,  at  one  hundred  and  fifty-two  millions  of  dollars.  We 
may,  therefore,  conclude  that  what  Mr.  Gallatin  says,  in  the  pamphlet  just 
referred  to,  is  substantially  correct — that,  “by  the  suppression  of  all  notes 
of  a  less  denomination  than  £5*sterling,  the  amount  of  the  circulating  me¬ 
tallic  currency  in  England  has  become  equal  to  that  of  bank  notes  of  every 
description.”  One-half  of  the  entire  circulation  consists  of  gold  and  silver, 
constantly  passing  from  hand  to  hand,  and  performing  all  the  offices  of  ex¬ 
change  in  the  ordinary  business  of  life,  and  thus  forming*,  in  fact,  the  prac¬ 
tical  currency  of  the  country.  It  is- this  large  infusion  of  the  precious 
metals  which  has  preserved  the  currency  of  England,  in  the  main,  in  a 
healthy  condition,  under  a  system  of  banking  which  her  Prime  Minister 
himself  (Lord  Liverpool,)  in  1826  pronounced  to  be,  in  other  respects,  “the 
most  insecure,  the  most  rotten,  the  very  worst,  which  it  is  possible  to  con¬ 
ceive.”  Much  has  been  said  recently,  i  know,  Mr.  President,  of  great  com¬ 
mercial  embarrassments  in  England,  which  are  attributed  by  many  to  a 
deranged  state  of  her  currency.  These  embarrassments,  in  my  opinion,  are 
viewed  in  much  too  serious  a  light ;  but,  if  they  were  not,  it  must  be  borne 
in  mind  that  all  commercial  countries,  however  solid  the  constitution  of 
their  currency,  will  occasionally  be  visited  by  revulsions  in  trade.  If,  too, 
they  are  to  be  considered  as  indicating  a  derangement  in  the  currency  of 
England,  the  source  of  that  derangement  is  to  be  found  in  those  defects  of 
her  system  of  banking  which  were  referred  to  by  Lord  Liverpool  as  making 
it  so  insecure  and  precarious,  and  not,  surely,  in  that. salutary  check,  the 
prohibition  of  small  notes.  On  the  contrary,  the  abundance  of  gold  and 
silver  which  that  restriction  secures  in  the  common  circulation  of  the  coun¬ 
try  is  the  great  preservative  of  the  system,  and  the  anchor  which  enables  it 
to  ride  in  safety  amid  fluctuations  and  tempests  that  might  otherwise  over¬ 
whelm  or  subvert  it. 

It  is  this  abundant  supply  of  the  precious  metals,  filling  and  saturating 
•  the  ordinary  channels  of  circulation,  which  I  desire  to  see  brought  about 
in  our  own  country.  That  is  the  end  to  be  aimed  at.  What  are  the 
4  means  by  which  it  is  to  be  accomplished  ?  Wc  have  seen  that  in  England 
it  has  been  accomplished  by  the  prohibition  of  all  bank  notes  of  a  less  de¬ 
nomination  than  £5.  Similar  means  will,  doubtless,  accomplish  the  same 
end  here ;  and,  1  must  add.  nothing  else  will.  It  is  in  vain  to  expect  to 
bring  gold  and  silver  coins  into  circulation,  without  a  previous  suppression 
of  all  notes  of  corresponding  denominations.  The  reason  is  obvious.  If 
there  exist  in  any  country  two  distinct  currencies,  both  of  them  answering 
equally  well  the  purposes  of  domestic  circulation,  but  one  of  them  possess- 


10 


ing  only  a  local  value,  confined  to  the  country  of  its  emission,  while  the  other 
has  a  universal  and  equal  value  throughout  the  world,  the  latter  will  ne¬ 
cessarily  go  abroad  into  the  commerce  of  the  world,  in  quest  of  the  riches 
and  productions  of  foreign  nations,  leaving  the  former  at  home  to  perform 
an  office  which  it  does  equally  as  well,  though  it  would  be  wholly  without 
use  or  value  abroad.  The  total  incompatibility,  therefore,  of  a  paper  and 
metallic  currency  of  the  same  denominations  has  grown  into  an  axiom. 
Edmund  Burke,  (whose  sagacity  in  questions  of  this  sort  is  well  known,)  at 
the  memorable  period  of  the  bill  brought  forward  by  Mr.  Pitt  for  the  sus¬ 
pension  of  specie  payments  by  the  Bank  of  England,  in  1797,  in  a  letter, 
written  during  his  last  illness,  to  Mr.  Canning,  which  the  latter  gentleman 
brought  most  touchingly  to  the  notice  of  the  House  of  Commons,  in  a  de¬ 
bate  of  great  interest  and  instruction  on  this  whole  subject,  at  a  much  more 
recent  period,  (1826,)  used  these  memorable  words  :  “  Tell  Mr.  Pitt  that,  if 
tie  consents  to  the  issue  of  one-pound  notes,  he  will  never  see  a  guinea 
again.”  The  prophecy,  sir,  became  history.  No  one  saw  a  guinea  in  cir¬ 
culation  in  England  while  the  bank  continued  the  issue  of  one-pound  notes. 

In  1828,  when  a  great  struggle  again  took  place  in  the  British  Parlia¬ 
ment,  on  the  final  consummation  of  the  effort  to  restore  a  metallic  cur¬ 
rency,  there  was  not  a  single  distinguished  man  who  did  not  bear  his  testi¬ 
mony  to  the  truth  of  Mr.  Burke’s  axiom.  'The  Chancellor  of  the  Exche¬ 
quer  said,  on  that  occasion,  “  there  was  a  natural  antipathy  between  the 
one-pound  note  and  the  sovereign.  They  would  not  exist  together,  for  the 
note  soon  drove  the  sovereign  out  of  circulation.”  The  Duke  of  Welling¬ 
ton,  who  was  eminently  a  practical  man,  and  spoke  from  the  teachings  of 
experience,  said,  “the  experience  of  the  last  few  years  had  proved  the  truth 
•of  the  theory,  that  one  pound  notes  and  gold  sovereigns  would  not  circu¬ 
late  at  the  same  time.  If  you  are  to  have  gold  in  circulation,  you  cannot 
have  one-pound  notes.”  Mr.  Huskisson,  whose  familiarity  with  questions 
of  this  sort  was  the  result  of  profound  studies,  as  well  as  matured  experi¬ 
ence,  said,  still  more  pointedly,  “  when  the  paper  is  let  in,  the  gold  will  dis¬ 
appear.  They  might  vote  the  money  ;  they  might  coin  it ;  but  how  could 
they  retain  it  in  the  country?”  This  remark  applies  most  forcibly  to  our 
present  situation.  We  have  voted  the  metallic  money  ;  we  have  corned  it : 
but  it  will  not  circulate.  Since  we  corrected,  bylaw,  the  undervaluation  of 
the  gold  coins,  (but  little  more  than  two  years  ago,)  the  quantity  of  gold  in 
the  country,  according  to  the  late  annual  report  of  the  Secretary  of  the 
'Treasury,  has  increased  fifteen  millions.  We  have  coined  at  our  own  mint, 
within  that  time,  according  to  the  same  authority,  ten  millions  of  gold.  But 
where  is  it  ?  In  the  vaults  of  the  banks,  or  hoarded  by  individuals  i  and 
we  shall  never  see  it  in  circulation,  until  we  have  opened  the  way  for  it  by 
a  previous  suppression  of  the  small  notes.  If  we  mean  to  do  any  thing  prac¬ 
tical  and  effectual  for  introducing  a  more  general  circulation  of  specie,  we 
must  begin  at  the  right  end,  by  first  putting  down  the  small  note  circula¬ 
tion.  '  '■ 

This  is  the  true  policy  of  the  Government,  and  is  that  practical  refoim 
of  the  currency  which  has  been  steadily  held  in  view  by  the  present  ad¬ 
ministration  and  its  friends.  The  honorable  Senator  from  Massachusetts 
(Mr.  Webster)  discovered  great  solicitude  to  know  what  is  to  be  the  system 
of  policy  of  the  new  administration  upon  this  subject.  1  have  no  means  of 
knowing,  Mr.  President,  which  that  gentleman  does  not  equally  possess. 
It  is  generally  supposed,  however,  that  the  coming  administration  will,  in 


II 


the  main,  conform  its  policy  to  the  exemplar  of  the  present.  The  inquiry 
of  the  honorable  gentleman,  then,  may  be  satisfied,  by  showing  him  what 
has  been  the  policy  of  the  present  administration  ;  and  that  cannot  be  better 
stated  than  in  the  words  of  our  venerable  and  patriotic  Chief  Magistrate 
himself.  I  beg  the  indulgence  of  the  Senate  while  I  read  a  very  unequivo¬ 
cal  and  explicit  passage  on  this  subject  in  the  President’s  message  of  the 
last  year.  In  that  document,  he  says : 

“  It  has  been  seen  that,  without  the  agency  of  a  great  moneyed  monopoly,  the  revenue  can 
be  collected,  and  conveniently  and  safely  applied  to  all  the  purposes  of  the  public  expenditure. 
It  is  also  ascertained  that,  instead  of  being  necessarily  made  to  promote  the  evils  of  an  un¬ 
checked  paper  system,  the  management  of  the  revenue  can  be  made  auxiliary  to  the  reform 
which  the  Legislatures  of  several  of  the  States  have  already  commenced  in  regard  to  the  sup¬ 
pression  of  small  bills,  and  which  has  only  to  be  fostered  by  proper  regulations  on  the  part  of  Con¬ 
gress  to  secure  a  practical  return ,  to  the  extent  required  for  the  security  of  the  currency  fo  the  con¬ 
stitutional  medium.  Severed  from  the  Government  as  political  engines.  and  not  susceptible  of 
dangerous  extension  and  combination,  the  Slate  banks  will  not  be  tempted,  nor  will  they  have 
the  power  which  we  have  seen  exercised,  to  divert  the  public  funds  from  the  legitimate  pur¬ 
poses  of  the  Government.  The  collection  and  custody  of  the  revenue  being,  on  the  contrary, 
a  source  of  credit  to  them,  will  increase  the  security  which  the  States  provide  for  a  faithful 
execution  of  their  trusts,  by  multiplying  the  scrutinies  to  which  their  operations  and  accounts 
will  be  subjected.  Thus  disposed,  as  well  from  interest  as  the  obligations  of  their  charters,  it 
cannot  be  doubted  that  such  conditions  as  Congress  may  see  fit  to  adopt  respecting  the  deposites 
in  these  institutions,  with  a  view  to  the  gradual  disuse  of  the  small  bills ,  will  be  cheerfully  com¬ 
plied  with;  and  that  we  shall  soon  gain,  in  place  of  the  Bank  of  the  United  States,  a  practical 
reform  hi  the  wliola  paper  system  of  the  country.  If,  by  this  policy,  we  can  ultimately  witness 
the  suppression  of  all  bank  bills  below  twenty  dollars ,  it  is  apparent  that  gold  and  silver  will  take 
their  placej  and  become  the  principal  circulating  medium  in  the  common  business  of  the  far¬ 
mers  and  mechanics  of  the  country.  The  attainment  of  such  a  result  will  form  an  era  in  the 
history  of  our  country,  which  will  be  dwelt  upon  with  delight  by  every  true  friend  of  its  liberty 
and  independence.  It  will  lighten  the  great  tax  which  our  paper  system  has  so  long  collected 
from  the  earnings  of  labor,  and  do  more  to  revive  and  perpetuate  those  habits  of  economy  and 
simplicity  which  are  so  congenial  to  the  character  of  republicans,  than  all  the  legislation  which 
has  yet  been  attempted.’’ 

Here  we  have  a  complete  delineation  of  the  policy  of  the  administration 
on  this  great  question  of  the  currency.  Neither  the  President,  nor  the 
body  of  his  friends,  have  proposed  a  total  suppression  of  bank  paper,  or  an 
exclusive  metallic  currency  ;  but,  to  use  his  own  words,  they  have  desired 
to  see  “a  practical  reform  in  the  banking  system,  by  the  ultimate  suppres¬ 
sion  of  all  bank  bills  below  tiventy  dollars  ;  so  that  gold  and  silver  might 
take  their  place,  and  become  the  principal  circulating  medium  in  the  com¬ 
mon  business  of  the  farmers  and  mechanics  of  the  country.”  This,  he  ex¬ 
pressly  declares,  would  be  “  a  practical  return,  to  the  extent  required  for  the 
security  of  the  currency ,  to  the  constitutional  medium  and  the  attain¬ 
ment  of  which,  he  adds,  “will  form  an  era  in  the  history  of  our  country, 
which  will  be  dwelt  upon  with  delight  by  every  true  friend  of  its  liberty  and 
independence.”  There  is  nothing  in  the  Treasury  Circular  inconsistent 
with  this  interpretation  of  the  policy  of  the  administration.  That  mea¬ 
sure,  as  I  have  already  said,  was  an  occasional  and  temporary  act,  resorted 
to'undera  peculiar  emergency,  till  the  power  of  Congress  could  be  inter¬ 
posed  to  apply  a  more  systematic  remedy,  and  cannot  be  considered  as  a 
departure  from  a  settled  and  general  line  of  policy.  On  the  contrary,  the 
President,  in  his  message  at  the  commencement  of  the  present  session,  ex¬ 
pressly  recurs  to  the  suppression  of  the  lower  denominations  of  bank  notes, 
by  the  concurrent  legislation  of  the  General  and  State  Governments,  as 
forming  “the  true  policy  of  the  country,”  by  which  only  “a  larger  portion 
of  the  precious  metals  can  be  infused  into  our  circulating  medium.”  No 
other  plan  can  be  effectual  for  the  accomplishment  of  such  a  result ;  and, 


12 


until  it  shall  be  adopted,  all  that  may  be  said,  however  glowing  and  fasci¬ 
nating,  of  the  advantages  of  a  metallic  circulation,  will  prove  but  barren 
theory,  and  delusive  and  unprofitable  generality.  You  may  bring  gold  and 
silver  into  the  country,  and  pile  them  mountains  high  in  your  banks ;  but, 
without  the  suppression  of  the  small  notes,  they  will  never  circulate  in  the 
business  of  society,  and  will  always  be  exposed  to  be  drawn  off  by  the  ab¬ 
sorbing  currents  of  foreign  trade.  The  object  of  a  rational  policy  is,  to 
bring  them  into  daily  and  active  use,  invigorating  and  sustaining  the  pur¬ 
suits  of  industry,  and  not  to  have  them,  like  the  ancient  household  relics 
described  by  the  poet,  “  wisely  kept  for  show.5’ 

The  question,  then,  is,  by  what  means  in  our  power  this  great  object  of 
the  suppression  of  the  small  notes  may  be  promoted  or  accomplished.  It 
is  through  the  collection  and  management  of  the  public  revenue  only, 
that  the  agency  of  this  Government  can,  at  present,  be  usefully  interposed. 
By  refusing  to  receive,  in  payment  of  the  public  dues,  the  notes  of  all 
banks  which  shall  issue  bills  of  the  lower  denominations,  as  is  proposed  by 
the  resolution  I  have  had  the  honor  to  submit,  a  strong  inducement  of  in¬ 
terest  will  be  held  out  to  the  leading  State  banks  to  discontinue  their  smaller 
issues.  The  consideration  of  the  credit  and  more  general  currency 
given  to  their  paper,  by  a  receivability  in  payment  of  the  revenue,  would, 
doubtless,  induce  more  or  less  of  them  to  conform  to  the  standard  which 
shall  be  established  in  this  respect  by  the  legislation  of  Congress.  But  my 
reliance  is  not  so  much  upon  the  operation  of  this  measure  per  se ,  as  upon 
the  moral  influence  it  is  calculated  to  exert  upon  the  policy  of  the  States. 
They  have  the  complete  power  to  prohibit,  by  law,  the  emission  and  cir¬ 
culation  of  the  smaller  notes  ;  and  I  cannot  doubt,  if  this  Government  shall 
hold  up  to  them  a  standard  deemed  indispensable  to  the  purification  and 
reform  of  the  currency,  that  that  power  will,  in  process  of  time,  be  exerted 
so  as  to  second  and  render  effectual  the  policy  of  our  legislation  here. 
Have  we  not  every  encouragement,  in  what  has.  already  taken  place,  to 
hope  for  such  a  result  ?  It  is  only  a  few  years  ago  that  blit  three  of  the 
States,  according  to  Mr.  Gallatin,  (Pennsylvania,  Maryland,  and  Virginia,) 
had  prohibited  the  issue  of  notes  under  five  dollars.  But,  since  that  time,  it 
has  been  the  policy  of  the  General  Government,  in  the  collection  and  man¬ 
agement  of  the  public  revenues,  to  discountenance  bank  notes  under  that 
denomination.  And  what  has  been  the  result?  We  have  seen  the  States, 
one  by  one,  successively  conforming  to  the  example,  till  now  a  majority  of 
them  have  prohibited  all  bank  notes  under  the  denomination  of  five  dollars. 
The  confidence  I  feel  in  the  enlightened  patriotism  of  the  State  Govern¬ 
ments,  £nd  in  the  popular  intelligence  and  virtue  which  control  them, 
gives  me  every  assurance  that  an  appeal  to  their  co-operation  in  so  great 
and  noble  a  work  will  not  be  in  vain,  especially  when  they  shall  have 
before  them  a  sober  and  practical  exhibition  of  the  probable  results  of  the 
policy  in  which  their  concurrence  is  invited. 

Let  us  then  inquire  what  is  likely  to  be  the  extent  of  the  effect  which 
will  be  produced  on  the  currency  by  the  successive  prohibition  of  all  notes  \ 
under  five,  ten,  and  twenty  dollars,  respectively.  Mr.  Gallatin,  whose  skill 
in  questions  of  this  sort  is  universally  admitted,  in  his  able  pamphlet  on 
the  currency,  written  in  1830,  estimated  the  reduction  in  the  amount  of 
the  paper  circulation  which  would  arise,  at  that  time  from  the  suppression 
of  all  notes  under  five  dollars,  at  six  millions ;  and  that  likely  to  be  pro¬ 
duced  by  a  suppression  of  the  notes  under  ten  dollars,  at  about  seven  mil- 


13 


lions ;  making  an  aggregate  of  thirteen  millions  of  dollars,  and  eqtial  to  one- 
tifth  of  the  whole  paper  circulation  of  the  country.  Another  highly  re¬ 
spectable  authority  on  American  banking,  (Gouge,)  estimates,  in  1831,  the 
amount  of  notes  under  five  dollars  then  in  circulation  at  seven  millions  ; 
and  of  notes  under  ten  dollars,  at  ten  millions ;  making  an  aggregate  of 
seventeen  millions.  But  let  us  take  Mr.  Gallatin’s  estimate,  and  suppose 
that  the  suppression  of  the  notes  under  five  and  ten  dollars  would,  together, 
operate  a  reduction  of  one-fifth  in  the  whole  amount  of  bank  paper  in  cir¬ 
culation.  Let  us  then  suppose,  (which,  I  presume,  would  not  be  extrava¬ 
gant,)  that  the  suppression  of  all  notes  under  twenty  dollars,  and  above  ten, 
would  produce,  in  amount,  a  diminution  of  one-fifth  more  of  the  paper  cir¬ 
culation.  By  the  ultimate  suppression  of  all  notes  under  twenty  dollars, 
we  should  then  gain  an  aggregate  reduction  of  two-fifths  in  the  whole  paper 
circulation  of  the  country.  According  to  the  recent  report  of  the  Secretary 
of  the  Treasury,  the  whole  paper  circulation  of  the  country  amounts  at 
this  time  to  120  millions,  two-fifths  of  which  would  be  48  millions  of  dol¬ 
lars.  But,  in  order  to  be  within  sure  limits,  we  will  suppose  that  the 
amount  of  bank  paper  which  would  be  withdrawn  from  circulation  by  the 
suppression  of  all  notes  under  twenty  dollars,  would  be  only  40  millions. 
That,  of  course,  would  be  replaced  by  an  equal  amount  of  gold  and  silver. 
How,  then,  would  stand  the  account  in  the  final  result  ?  Forty  millions, 
taken  from  the  120  millions  of  paper  circulation,  would  leave  80  millions 
of  paper;  and  added  to  the  28  millions  of  gold  and  silver  already  in  circu¬ 
lation,  according  to  the  estimate  of  the  Secretary  of  the  Treasury,  would 
give  ns  68  millions;  or,  (for  the  sake  of  round  numbers,  and  to  compensate 
liberal  deductions  made  above,)  70  millions  of  gold  and  silver  in  active 
circulation — not  dammed  up  and  stagnating  in  the  coffers  of  the  banks,  but 
spread  over  the  land,  irrigating,  refreshing,  and  fertilizing  the  whole 
country. 

Such,  Mr.  President,  would  be  the  solid  and  practical  result  of  the  ulti¬ 
mate  suppression  of  all  bank  bills  under  the  denomination  of  twenty  dol¬ 
lars.  It  would  give  to  the  country  nearly  one  half  of  its  whole  circulation 
in  the  precious  metals,  forming  a  solid  and  unfailing  fund  for  the  payment 
of  labor,  for  the  buying  and  selling  of  the  necessaries  of  life,  for  the  great 
mass  of  daily  transactions,  including  the  wants  and  interests  of  the  farmer, 
the  mechanic,  and  the  tradesman  ;  while  the  other  half  would  consist  of  an 
improved  paper  currency  for  the  use  and  accommodation  of  the  merchant, 
and  for  the  larger  operations  of  trade  and  business.  I  would  ask  gentle¬ 
men  if  such  a  result  is  not  “  a  consummation  devoutly  to  be  wished?” 
Would  it  not,  in  the  glowing  and  patriotic  language  of  the  President,  form 
11  an  era  in  the  history  of  the  country  which  would  be  dwelt  upon  with  delight 
by  every  true  friend  of  its  liberty  and  independence?”  And  can  we  sup¬ 
pose  that  the  enlightened  Legislatures  of  the  States,  in  the  view  of  such  a 
result,  pregnant  with  consequences  so  important  to  the  safety,  the  prosperi¬ 
ty,  and  the  morals  of  the  whole  community,  and  especially  to  the  interests 
of  those  numerous  and  industrious  classes  which  form  the  basis  and  sup¬ 
port  of  our  republican  system,  could  be  so  deaf  to  the  united  call  of  patri¬ 
otism  and  wisdom,  as  not  to  lend  their  co-operation  in  so  great  and  salutary 
a  reform?  For  myself,  Mr.  President,  I  feel  a  cheering  confidence  that 
they  will  give  a  helping  and  efficient  hand  to  this  great  work.  The  Legis¬ 
lature  of  my  own  State  is  now  engaged  in  revising  her  banking  system, 
and  I  console  myself  in  the  belief  that  she  will  be  among  the  foremost  to 


14 


vindicate  the  wisdom  and  patriotism  of  the  State  councils  from  distrust,  by 
heartily  seconding,  in  her  legislation  on  the  subject,  our  efforts  here  to  estab¬ 
lish  a  sound  currency  for  the  country. 

But,  sir,  till  by  the  suppression  ©f  the  small  notes  the  circulation  of  the 
country  has  become  better  filled  with  the  precious  metals,  I  do  not  think 
it  would  consist  with  a  just,  wise,  and  paternal  policy  on  the  part  of  the 
Government  to  exact  payment  of  its  dues  in  specie  exclusively.  It  could 
not  be  done,  without  great  hardship  to  the  public  debtor,  and  extensive  dis¬ 
tress  and  embarrassment  to  the  whole  community.  To  demonstrate  this, 
nothing  more  is  necessary  than  to  compare  the  amount  of  specie  in  circu¬ 
lation  with  the  amount  of  the  revenue;  for  it  is  conceded  now,  that  if  pay¬ 
ment  of  one  branch  of  the  revenue  be  required  by  any  permanent  regula¬ 
tion  to  be  made  in  specie,  all  ought  to  be  paid  in  specie.  According  to  the 
estimate  of  the  Secretary  of  the  Treasury,  (which  appears  to  me  a  very 
liberal  one,)  the  whole  amount  of  specie  in  circulation  does  not  exceed 
twenty-eight  millions  of  dollars.  The  revenue  during  the  last  year  amount¬ 
ed  to  forty-seven  millions  :  and  perhaps,  with  all  our  efforts  to  reduce  it,  it 
may  still  not  fall  short  of  thirty  millions.  There  would  then  be  thirty 
millions  of  dollars  to  be  paid  to  the  Government,  out  of  a  circulation  of 
twenty-eight  millions  !  To  confront  the  two  sums  is  to  show  the  temerity, 
if  not  the  impossibility,  of  the  attempt.  If  the  public  debtors  should  be 
thrown  upon  the  banks  for  large  amounts  of  specie,  not  to  be  had  from  the 
circulation  of  the  country,  no  one  can  be  at  a  loss  to  perceive  to  what  a 
disastrous  extent  the  business  relations  and  pecuniary  concerns  of  the  whole 
community  would  be  embarrassed  and  deranged.  And  how  much  of  specie, 
permit  me  to  ask,  would  remain  for  that  immense  mass  of  payments  in  pri¬ 
vate  transactions,  which.,  according  to  a  practical  estimate  made  by  Mr. 
Gallatin,  in  reference  to  the  revenue  collected,  and  the  business  done,  in  the 
city  of  New  York,  exceeds  more  than  fifty  times  the  payments  to  the  Gov¬ 
ernment?  Nothing,  therefore,  can  be  clearer  than  that  an  attempt,  with  our 
present  limited  metallic  circulation,  to  collect  the  public  revenue  in  specie 
alone,  would.be  distressing  to  the  last  clcgjqe.and  could  not  abide  the  test  of 
that  public  judgment,  without  whose  approbation  no  system  of  policy  can 
or  ought  to  stand.  .  "  ..  . 

The  honorable  Senator  from  Missouri,  (Mr.  Benton,)  in  the  able  speecli 
made  by  him  in  the  opening  of  this  discussion — a  speecli  which  does  him 
great  credit,  not  only  for  the  extent  and  variety  of  the  research -displayed 
by  him,  but  for  the  force  and  ability  with  which  he  illustrated  his  own 
views,  (in  some  of  which  it  is  my  misfortune  to  differ  from  him)- — brought 
to  the  notice  of  the  Senate,  from  the  evidence  taken  before  thc  Committee  of 
Secrecy  of  the  House  of  Commons  on  the  Bank  of  England  charter  in  1S32, 
the  case  of  a  banker  at  Manchester,  who  paid  out,  in  the  course  of  the  year, 
about  six  millions  of  dollars  in  specie  to  the  operatives  of  that  pi  ace.  ^  But 
this  was  done  in  a  country  which,  as  I  have  already  shown,  possesses  an*  ac¬ 
tual  circulating  metallic  currency  of  one  hundred  and  fifty  millions  of  dollars, 
whereas  our  metallic  circulation  is  but  twenty-eight  millions  !  The  exam¬ 
ination  of  Mr.  Samuel  Jones  Lloyd  (the  banker  referred  to)  on  this  point,  is 
so  instructive  in  itself,  and  so  strikingly  illustrative  of  Ihe  arguments.  I  have 
advanced,  that  I  beg  leave  to  read  the  whole  of  that  portion  of  it  to  the 
Senate,  in  the  form  of  question  and  answer  in  which  it  is  reported  :• 


i 


i 


“  Question.  You  are  aware  that  a  great  amount  of  specie  is  required  every  week  for  the 
jfiay merit  of  wages  at  Manchester? 


15 


Answer.  A  very  large  amount. 

Question.  Can  you  give  the  committee  any  idea  of  the  amount  ] 

Answer.  No,  I  cannot;  but  so  far  as  regards  the  issue  of  our  own  house,  I  should  say  that- 
upon  the  average  we  pay  about  *25,000  sovereigns  a  week. 

Question.  Is  that  a  fresh  supply  of  sovereigns  in  each  week,  or  do  you  obtain  it  from  the 
circulation  of  the  place ? 

Answer.  We  require  a  continual  fresh  supply,  but  not  to  that  extent.  1  think  the  fresh 
supply  requisite  will  average  something  less  than  10,000  a  week. 

Question.  Before  the  abolition  of  the  £1  notes,  were  those  payments  generally  made  in  £1 
notes  ] 

Answer.  Entirely. 

Question.  Was  the  amount  then  about  the  same  'l 

Answer.  Quite  as  large. 

Question.  You  say  that  about  25,000  a  week  is  what  you  are  called  upon  altogether  to  pay, 
and  that  about  15,000  come  back  into  your  hands  ?  What  do  you  apprehend  becomes  of  the  re¬ 
maining  10,000  sovereigns! 

Answer.  When  the  £1  notes  were  in  circulation,  we  could  trace  it  pretty  accurately,  and  J 
believe  the  course  to  be  the  same  with  the  sovereigns;  they  are  paid  principally  in  wages. 
The  work  people  lay  them  out  in  clothing  and  provisions,  and  those  sovereigns  pass  to  the  pro¬ 
vision  dealers;  and  thence  into  the  districts  from  which  the  provisions  are  supplied;  the  sover¬ 
eigns  then  pass  into  the  hands  of  the  country  bankers  in  tho>e  districts,  v:ho  either  send  up  to 
London ,  or  return  them  to  Manchester ,  as  may  be  most  convenient  to  them. 

Question.  It  does  not  follow,  then,  because  you  are  obliged  to  have  10,050  sovereigns  from 
the  branch  bank,  (that  is,  branch  of  the  Bank  of  England)  that  the  amount  of  the  circulation 
in  Manchester  is  continually  increasing  at  the  rate  of  10,000  a  week  ] 

Answer.  No,  I  do  not  apprehend  it  is  increasing  at  all.” 


Now,  sir,  let  us  see  how  these  large  payments  in  specie,  in  Manchester,  are 
made.  Mr.  Lloyd  says  expressly,  that,  of  the  25,000  sovereigns  a  week  paid 
out  by  him,  15,000  of  them  are  obtained  from  the  circulation  of  the  j)lacer 
as,  through  that  channel,  they  regularly  come  back  into,  his  hands ;  that 
lie  requires  a  fresh  supply  of  about  10,000  sovereigns  a  week,  from  the 
bank;  but  these  ten  thousand  sovereigns  are  also  constantly  returning 
to  the  bank  from  the  circulation  of  the  country.  They  are  first  paid  by  the 
work  people1  to  the  provision  dealers ;  then,  by  the  provision  dealers  to  the 
farmers,  of  whom  they  procure  their  supplies;  from  the  farmers  they  pass 
into  the  hands  of  the  country' bankers,  who  either  return  them  to  the 
branch  bank  at  Manchester,  or,  what  is  the  same  thing  in  effect,  send  them 
up  to  the  parent  bank  at  London.  Thus,  the  whole  amount  of  these  specie 
payments  is  supplied  by  the  actual  circulating  medium  of  the  country — a 
thing  easy  and  convenient  enough,  and  perfectly  natural,  where  the  amount 
of  gold  and  silver  in  daily  and  active  circulation  is  150,000,000  of  dollars. 
To  make  large  payments  in  specie,  under  such  circumstances,  is  attended 
with  no  difficulty,  because  specie  is  the  common  and  habitual  currency  of 
the  country.  The  metallic  circulation  of  England  is  a  perpetual  fountain, 
fed  by  the  streams  which  flow  from,  and  are  constantly  returning  into,  it. 
But  to  make  payments  in  specie,  to  the  Government  alone ,  of  thirty  or 
twenty  millions  of  dollars, ’or  .the  half  or  the  fourth  of  those  sums,  in  a 
country  whose  circulation  consists  of  1 20,0(10,000  of  paper,  and  of  but 
&  ,000,000  of -gold  and  silver,  is  a  far  different  operation. 

Another  most  important  lesson  is  to  be  derived  from  the  evidence  of  Mr. 
Lloyd.  How  were  these  payments  for  wages  made  in  Manchester  previous 
to  the^prohibition  of  the  small  notes?  I ri -stove feigns  /  In  gold  or  silver  ? 
Let  us  turn  to  the  examination  of  Mr.  Lloyd. 


‘  Question.  Before  the  abolition  of  the  £1  notes*,  were  those  payment***  generally  made  in  £1 
notes  I 

Answer.  Entirely 

Question.  Was  the  amonu  then  aho  t  ihe  sam1] 

Answer.  Quite  as  large,” 


16 


Previous  to  the  suppression  of  the  small  notes,  then,  the  whole  amount 
of  payments  now  made  in  gold,  were  made  exclusively  in  one-pound  notes  ; 
and,  but  for  that  suppression,  would  still  be  made  in  one-pound  notes. 
While  the  one-pound  notes  were  in  circulation,  these  payments  could  not 
be  made  in  gold,  because  gold  was  not  in  circulation.  Gold  was,  doubt¬ 
less,  in  the  country,  accumulated  in  the  vaults  of  banks;  but  not  being  in 
circulation,  there  was  no  common  and  accessible  fund  from  which  it  could  be 
readily  and  conveniently  obtained  for  the  business  of  life.  It  never  will  be 
in  circulation  until  bank  notes  of  the  smaller  denominations  have  been  first 
suppressed.  It  is  in  vain  for  the  Government  to  attempt  to  bring  it  into 
circulation  by  demanding  it  in  payment  of  the  public  dues.  By  doing  so. 
the  public  debtor  may  be  subjected  to  hardship,  the  banks  may  be  exposed 
to  runs  upon  them  for  specie,  and  the  business  of  the  community  may  be 
crippled  and  deranged.  But  gold  and  silver  will  never  circulate  while 
bank  notes  of  the  same  denomination  are  permitted  to  occupy  the  channels 
of  circulation.  u  You  may  call  spirits  from  the  vasty  deep,  but  will  they 
come  V 

The  requisition  of  specie  in  payments  to  the  Government  will  notonly  not 
avail  to  bring  gold  and  silver  into  circulation,  but,  if  insisted  on,  while  gold  and 
silver  yet  form,  comparatively,  but  a  small  part  of  the  actual  currency  of  the 
country,  it  will  inevitably  have  the  effect  of  diminishing  their  circulation. 
While  bank  paper  forms  the  great  mass  of  the  currency  of  the  country,  if 
the  Government  refuse  to  receive  it  in  payment  of  the  public  dues,  and 
demand  specie  exclusively,  the  necessary  consequence  will  be  to  enhance, 
to  a  greater  or  less  extent,  the  value  of  gold  and  silver  in  relation  to  paper. 
That  being  the  case,  gold  and  silver  will  no  longer  circulate  freely.  Those 
who  have  specie  will  be  unwilling  to  part  with  it,  except  at  a  premium ; 
and  those  who  have  notes  will  be  anxious  to  convert  them  into  specie. 
Hoarding  of  the  precious  metals  will  then  commence,  and  but  little  of  them 
be  seen  in  circulation.  No  one,  I  presume,  Mr.  President,  attaches  much 
importance  to  the  collection  of  the  public  revenue  in  specie,  as  an  ultimate 
object,  if  it  can  be  made  equally  safe  by  other  means.  It  is  only  as  an 
instrument  of  purifying  and  correcting  the  currency,  that  it  deserves  the 
consideration  of  a  practical  statesman.  The  great  object  is  not  to  amass 
specie  in  the  public  treasury,  or  in  the  vaults  of  banks,  but  to  diffuse  its 
healthful  currents  through  the  business  of  society,  and  to  bring  it  into 
active  circulation  among  the  people.  This  can  only  be  effected  by  the 
previous  suppression  of  the  small  notes;  and  any  attempt  by  the  Govern¬ 
ment,  before  that  is  done ,  to  collect  its  revenues  in  specie,  instead  of  pro¬ 
moting  and  extending  the  circulation  of  gold  and  silver,  tends  directly  to 
narrow  and  diminish  their  circulation. 

The  indiscriminate  refusal  of  bank  paper  in  payment  of  the  public  dues 
might,  in  the  present  condition  of  the  country,  be  attended  with  other  seri¬ 
ous  hazards.  We  have  heard  a  great  deal  recently,  Mr.  President,  of  the 
pecuniary  panic  and  distress  prevailing  in  England  and  Ireland,  and  of  the 
extensive  commercial  embarrassments  felt  there.  These  embarrassments, 
(in  Ireland,  especially,)  seem  to  have  arisen  mainly  from  this  very  circum¬ 
stance  of  a  refusal  to  receive  the  paper  of  solvent  banks  in  collections  of  the 
public  revenue.  It  appears  that  some  of  the  collectors  of  the  customs  had 
arbitrarily  refused  the  bills  of  the  Provincial  Bank  of  Ireland.  Thereupon,  a 
run  upon  the  bank  immediately  commenced,  which,  nevertheless,  weathered 
the  storm.  The  panic  spread  in  regard  to  other  institutions,  which,  though 
.solvent,  were  compelled  to  stop  payment ;  and  a  general  scene  of  confusion* 


17 


alarm,  and  embarrassment  ensued.  But  I  will  give  the  details  in  an  extract 
from  an  English  paper,  which  has  been  republished  extensively  in  all  of  our 
principal  journals.  Here  it  is: 

“  The  pressure  was  yet  severe,  not  only  throughout  England,  but  in  Ireland.  In  the  latter 
country,  there  had  been  a  panic,  attended  by  several  severe  commercial  disasters.  This  panic 
was  commenced  by  the  collectors  of  the  customs  at  Newry,  and  some  other  places,  refusing  the 
bills  of  the  Provincial  Bank  of  Ireland.  A  run  upon  the  bank  was  the  inevitable  and  immedi- 
|  ate  consequence.  The  solvency  of  the  bank ,  however ,  had  never  been  questioned,  and  was  finally 
attested  by  the  result.  The  panic  spread  in  respect  to  other  institutions,  and  the  Dublin  Agri¬ 
cultural  Bank  stopped  payment  on  the  15th.  Strong  efforts  were  made  by  its  friends  to  sustain 
it.  One  gentleman,  Mr.  Gresham,  sent  iri  23,000/.  The  liabilities  of  the  bank  are  s:ate  1  at 
210,000/;  its  assets  at  680,000/. 

“This  bank  was  established  in  1834,  by  2,170  partners.  It  now  has 5,000 partners,  and  twenty  - 
six  branches  scattered  all  over  the  country,  all  of  which  stop  of  course.  Hut,  notwithstanding  the 
solvency  of  the  institution ,  its  suspension  will  operate  fearful  injury .” 

All  this  pecuniary  suffering  and  distress,  widely  ramified  as  it  afterwards 
became,  originated  in  the  refusal,  by  officers  of  the  Government,  to  receive 
the  notes  of  a  solvent  bank  in  payment  of  the  public  revenue.  If.  Mr. 
President,  we  shall,  by  a  sweeping  law,  refuse  to  receive  the  paper  of  all 
banks,  however  sound,  in  discharge  of  the  public  dues,  will  there  not  be 
danger  of  similar  consequences?  Might  it  not  operate,  to  a  certain  extent, 
as  a  discredit  of  all  bank  paper,  exposing  the  institutions  which  issue  it  to 
severe  runs,  and  the  community  at  large  to  consequential  pressure  and 
embarrassment?  At  all  events,  there  would  be  heavy  demands  upon  the 
banks  for  the  specie  requisite  in  payments  to  the  Government,  which  the 
limited  metallic  circulation  of  the  country  would  be  wholly  inadequate  to 
supply.  Would  it  be  just  or  wise  in  the  Government,  in  the  present  con¬ 
dition  of  the  currency,  with  a  Shylock  severity  to  demand  its  pound  of 
flesh?  Would  not  such  a  course  tend  to  produce,  instead  of  averting,  the 
catastrophe  which  appears  to  he  dreaded  by  some  ? 

I  should  he  as  little  disposed,  Mr.  President,  aS  any  member  of  this  body, 
to  hazard  the  safety  of  the  public  revenue  by  any  undue  laxity  in  regard  to 
its  collection.  The  proposition  I  have  had  the  honor  to  submit  provides 
studiously  for  the  security  of  the  revenue.  It  not  only  does  not  allow  the 
notes  of  any  hanks  to  he  received,  but  such  as  are  promptly  redeemed  in 
specie — subject,  too,  to  important  restrictions  in  regard  to  their  denomina¬ 
tions — but  it  expressly  declares  that  no  notes  whatever  shall  be  received 
which  the  banks  in  which  they  are  to  be  deposited  shall  not  agree  to  pass 
at  once  to  the  credit  of  the  United  States  as  cash.  This  guaranty  of  the 
deposite  banks  converts  the  whole, of  the  public  collections,  virtually,  into 
specie;  and  when  it  is  recollected  that  the  Secretary  of  the  Treasury  is  im- 
powered,  whenever  he  thinks  it  necessary,  to  obtain  from  them  a  special 
and  supplementary  security  for  the  public  deposites,  the  solidity  of  the 
guaranty  may  be  reposed  upon  with  confidence. 

It  is  objected  to  this  provision,  by  some  gentlemen,  that  it  puts  it  in  the 
i  power  of  the  deposite  hanks  to  say  what  notes  shall,  and  what  shall  not,  be 
received  by  the  Government  in  payment  of  its  revenues.  The  absolute 
responsibility  of  the  deposite  hanks  for  the  notes  deposited  with  them  oil 
public  account  is  deemed  a  fundamental  principle  in  the  fiscal  codp  of  the 
Government ;  without  it,  the  practice  of  special  deposites  must  be  revived, 
which  formerly  subjected  the  Government  to 'heavy  losses,  and  is  the  origin 
of  the  unavailable  funds  still  borne  on  the  books  of  the  Treasury.  But 
if  the  deposite  banks  are  to  he  absolutely  responsible  for  the  notes  deposited 


18 


with  them,  as  so  much  cash ,  they  ought  certainly  to  have  a  reasonable  dis¬ 
cretion  as  to  the  notes  they  shall  receive  on  deposite.  This  is  no  new 
principle  in  the  practice  of  the  Government ;  it ,  has  been  a  standing 
instruction  from  the  Treasury  Department  to  the  public  receivers  and 
collectors,  for  more  than  twenty  years,  to  receive  no  notes  but  such  as 
the  deposite  banks  would  credit  to  the  United  States  as  cash.  To  satisfy, 
however,  as  far  as  possible,  the  jealousy  which  has  been  expressed  on  this 
subject,  and  to  guard  against  any  arbitrary  or  wanton  abuse  of  their  discre¬ 
tion  by  the  deposite  banks,  I  have,  by  a  modification  of  my  original  resolu¬ 
tion,  placed  them,  in  this  regard,  expressly  under  the  supervision  and 
control  of  the  Secretary  of  the  Treasury. 

While  the  proposition  I  have  had  the  honor  to  submit  provides,  as  I 
believe,  in  the  amplest  manner,  for  the  security  of  the  public  revenue,  it 
pays  a  due  regard  to  the  interests  of  the  great  body  of  the  community.  An 
inflexible  exaction  of  gold  and  silver  in  payments  to  the  Government,  in 
the  present  condition  of  the  circulating  medium,  it  seemed  to  me,  would 
involve  a  necessary  and  serious  derangement  to  the  whole  business  and 
commerce  of  the  country.  These  interests  I  believe  to  be  more  or  less 
common  to  all.  I  am  not  one  of  those  who  see  a  natural  enmity  and  inhe¬ 
rent  incompatibility  between  the  interests  of  different  classes  of  men  ;  I  do 
not  belong  to  that  school  of  philosophy  which  divides  society  horizontally,' 
the  upper  portion  pressing  upon  the  lower  with  the  weight  of  its  incumbent 
mass,  while  the  latter  is  constantly  striving  to  throw  off  the  load  by  violent 
arid  vindictive  struggles.  This  is  the  helium  omnium  in  omnia  which 
forms  no  part  either  of  my  philosophy  or  my  feelings.  No,  sir  ;  my  theory 
assigns  a  perpendicular  stratification  to  society,  placing  all  its  component 
parts  side  by  side  on  the  same  platform  of  equality,  with  common  rights, 
common  interests,  and  common  duties,  mutually  giving  and  receiving  support 
by  their  juxtaposition.  In  this  aspect,  the  interests  of  the  merchant,  the 
farmer,  the  mechanic,  the  laborer,  are  the  same  ;  what  promotes  the  pros¬ 
perity  of  one,  redounds  to  the  advantage  of  each. 

In  regard  to  the  effect  upon  the  currency,  the  proposition  I  have  had  the 
honor  to  submit,  if  adopted,  would  prove  in  some  degree  instrumental,  I 
tiust,  in  promoting  that  great  reform  which  has  been  so  impressively 
recommended  by  the  patriotic  Chief  Magistrate  of  the  nation,  and  which, 
at  the  moment  when  he  is  about  to  close  a  long  and  glorious  career  of 
public  service,  in  a  hallowed  retirement,  “  by  all  a  nation’s  wishes  blest,”  may 
well  form  the  object  of  his  ardent  vows  for  his  country.  That  reform  seeks, 
by  the  substitution  of  gold  and  silver  in  place  of  the  lower  denominations 
of  bank  paper,  to  make  the  precious  metals  the  familiar  currency  of  com¬ 
mon  life.  But  this  object  can  be  fully  accomplished  only  by  the  ultimate 
suppression  of  all  notes  under  twenty  dollars  ;  five-dollar  notes  and  half 
eagles  will  not  circulate  together';  the  ten-dollar  note  must  be  put  down, 
before  the  eagle  can  take  its  place.  '  •  * 

I  am  aware,  Mr.  President,  that  our  position  is  not  exempt  from  difficul¬ 
ties  and  dangers.  But  I  see  in  them  nothing  to  create  alarm,  far  less  to  ex¬ 
cite  despondency ;  but  every  thing  to  rouse  the  devotion  and  energy  of  the 
patriot.  With  whatever  embarrassments  we  may  be  beset,  there  is  a  redeem¬ 
ing  power  in  the  virtue  and  intelligence  of  the  American  people,  which 
will  conduct  us  in  safety  and  triumph  through  them  all.  Some  gentlemen, 
I  find,  still  fondly  recur  to  their  favorite  prescription  of  a  national  bank  as 
the  panacea  for  all  our  ills.  I:i  my  humble  judgment,  sir,  the  remedy  is 


19 


far  worse  than  the  disease.  The  protection  of  a  national  bank  would  bo 
“  such  protection  as  vultures  give  to  lambs.”  No,  sir;  let  us  rather  invoke 
the  protectiod  of  our  guardian  and  victorious  bird,  the  American  eagle,  the 
emblem  of  our  freedom  and  strength.  An  able  and  experienced  member  of 
the  House  of  Commons,  speaking  of  the  inherent  tendencies  of  the  banking 
system,  said,  “  there  is  in  it  an  inevitable  tendency  to  over-issues  of  paper, 
without  a  constant  sentinel  keeping  watch  upon  it,  and  that  sentinel ”  (for 
them)  “  was  the  metallic  sovereign  in  constant  circulatipn.”  The  Ameri¬ 
can  metallic  eagle,  in  active  circulation,  will  perform  the  same  tutelary  of¬ 
fice  for  us  ;  and  with  such  other  provisions  as  the  practical  and  sagacious 
spirit  of  American  legislation  shall  devise,  will  finally,  I  firmly  believe 
place  our  currency  on  a  footing  which,  for  convenience  and  security  united, 
will  rival  any  other  under  the  sun. 

Let  the  State  Legislatures  proceed  firmly  and  vigorously  in  the  suppres¬ 
sion  of  the  small  notes.  I  believe  they  will.  They  have  the  highest  mo¬ 
tives  which  can  address  themselves  to  human  action  to  accomplish  this 
great  reform.  Let  them  subject  all  banks,  both  old  and  new,  to  efficient  re¬ 
gulation  ;  let  them  regard  with  jealousy  every  proposition  for  an  increase 
of  banks,  and  yield  to  none  which  is  not  founded  on  broad  considerations  of 
public  utility;  let  them  impose  strict,  practical  limitations  both  upon  their 
issues  and  their  discounts  ;  let  them  provide  for  frequent  periodical  scru¬ 
tinies  into  their  condition ;  and,  above  .all,  let  them  retain  in  their  own 
hands  a  constant  power  of  correcting  abuses,  and  of  protecting,  in  every 
emergency,  the  interests  of  the  community. 

It  is  this  principle  of  legislative  regulation  and  control  over  banking  in¬ 
stitutions,  which  constitutes  the  distinctive  feature  of  American  policy.  It 
is  the  result  of  the  practical  character  of  the  American  mind ;  and  I  am 
happy  to  perceive  that  the  people  of  older  countries — of  England  especially — 
are  turning  to  us  for  lessons  and  examples  in  this  branch  of  the  public  eco¬ 
nomy.  In  that  country,  beyond  the  65  miles  from  London,  which  define 
the  limits  of  the  Bank  of  England  monopoly,  numerous  broods  of  joint  stock 
'  companies  and  private  bankers  have  sprung  up,  without  regulation  bylaw, 
without  limitation  of  number,  without  restriction  as  to  their  issues  or  dis¬ 
counts,  and  without  responsibility  to  the  public  authority.  The  consequence 
has  been,  that  this  branch  of  their  system  has  run  into  wild  disorder  and 
confusion.  They  now  see  that  the  privilege  of  issuing  money,  of  whatever 
kind,  is  an  essential  branch  of  the  public  sovereignty^  and,  like  every  other 
delegated  power  of  that  sort,  it  must  be  subjected  to  regulation,  to  inspection, 
to  responsibility.  Thlsis  a  lesson  they  have  learned  from  ns;  and  it  is  gratifying 
to  see  that,  on  another  fundamental  point,  the  most  enlightened  minds  in  that 
country  are  coming  to  the  same  conclusion  that  we  have  attained.  They  be¬ 
gin  to  see  that  the  monopoly  of  the  Bank  of  England,  as  that  of  the  Bank  of  the 
United  States  here,  is  a  dangerous  monopoly;  that  the  dominion  of  such  an 
institution  over  the  circulation  is  a  power  more  of  evil  than  good  :  and  that  it 
must  be  brought  down  to  the  level  of  competition  with  other  solid  institutions. 
The  opinions  of  the  two  countries,  on  this  great  concern  of  the  currency,  are 
mutually  approximating,  and  settling  down  upon  a  common  system.  They 
are  learning  from  us  tire  necessary  checks  and  controls  of  a  paper  currency; 
we  from  them,. I  trust,  the  value  and  importance  of  an  enlarged  metallic  circu¬ 
lation.  I  repeat,  then,  there  is  nothing  in  our  present  situation  to  excite 
alarm  or  despondency,  whatever  occasion  there  may  !  o  for  vigilance  and 
caution.  Let  us  look  onr  dangers  steadily  in  the  face,  but  let  us  not  be  dismay- 


20 


ed  by  them.  Let  us  grapple  with  the  difficulties  which  may  oppose  us,  in  a 
spirit  of  strenuous  and  determined  patriotism,  and  we  shall  triumph  over 
and  subdue  them,  in  conclusion,  let  me  say  to  the  political  friends,  with 
whom  I  have  had  the  honor  to  act  in  trying  times,  that,  after  having  suc¬ 
cessfully  dissipated  so  many  panics  raised  under  other  auspices,  we  shall 
not,  I  trust,  at  last  become  the  victims  of  a  panic  ot  our  own  creation. 


